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on Labor Markets - Supply, Demand, and Wages |
| By: | Salomons, Anna (Tilburg University); vom Baur, Cäcilia (ifo Institute, University of Munich); Zierahn-Weilage, Ulrich (Utrecht School of Economics) |
| Abstract: | Does educational content respond to technological advances, enabling workers to acquire new expertise? We study how digital technology transforms skill acquisition and impacts workers' careers. We construct a novel database of legally binding vocational training curricula in Germany over 5 decades, and link curriculum updates to breakthrough technologies using Natural Language Processing. Technological change spurs curriculum updates, shifting training content toward digital and social skills while reducing routine-intensive task content, predominantly through new skill emergence. Curriculum updates account for two-thirds of deroutinization in vocational skill supply over this period. Using administrative employer-employee data and a stacked DiD design, we show curriculum updates help workers adapt: new-skilled workers earn higher wages, with increases up to 5.5\% for technology-exposed occupations. In contrast, older incumbents experience wage declines, indicating skill obsolescence. Firms increase capital investments when exposed to workers with updated skills, consistent with capital-skill complementarity. These findings highlight within-occupation skill supply adjustments' central role in meeting evolving labor market demands. |
| Keywords: | vocational training, skill obsolescence, skill updating, technological change, educational content |
| JEL: | J23 J24 J31 O33 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18248 |
| By: | Jesse Bruhn; Jacob Fabian; Luke Gallagher; Matthew Gudgeon; Adam Isen; Aaron R. Phipps |
| Abstract: | We study the causal effect of different early career occupational experiences on labor market outcomes. To do so, we pair over two decades of administrative tax data with internal personnel records from one of the largest employers of young adults in the United States: the US Army. Enlistees work in a diverse and varied set of occupations, including non-combat roles like mechanics, legal services, financial specialists, cooks, dental hygienists, police officers, and network/computer specialists. Occupational eligibility is determined by test score cutoffs which we leverage in a series of 35 regression discontinuity designs. We find that a typical early career occupational experience generates a substantial amount of path dependence, with point estimates that suggest a 19p.p. increase in the likelihood of being observed in an identical or closely related occupation as much as 20 years later. The corresponding impact of different occupations on earnings are highly heterogeneous, yet predictable: long-run changes in the average earnings of the occupations applicants are pushed into, and pulled out-of, can explain over 60% of the causal variation across cutoffs, with point estimates that suggest improvements in occupational earnings premia translate dollar-for-dollar into economic success. Taken together, our results highlight the importance of early career occupational experience as a key channel for promoting long-run well-being among young adults who are not college bound. |
| JEL: | J20 J24 J3 J38 J4 J45 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34463 |
| By: | Bertermann, Alexander (LMU Munich); Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung); Suedekum, Jens (Heinrich Heine University Düsseldorf); Woessmann, Ludger (University of Munich) |
| Abstract: | How do firms and workers adjust to trade and technology shocks? We analyze two mechanisms that have received little attention: training that upgrades skills and early retirement that shifts adjustment costs to public pension systems. We combine novel data on training participation and early retirement in German local labor markets with established measures of exposure to trade competition and robot adoption. Results indicate that negative trade shocks reduce training—particularly in manufacturing—while robot exposure increases training—particularly in indirectly affected services. Both shocks raise early retirement among manufacturing workers. Structural change thus induces both productivity-enhancing and productivity-reducing responses, challenging simple narratives of labor market adaptation and highlighting the scope for policy to promote adjustment mechanisms conducive to aggregate productivity. |
| Keywords: | workers, firms, robots, automation, technological change, trade, retirement, training, labor market |
| JEL: | J24 J26 O33 F16 R11 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18247 |
| By: | Ellora Derenoncourt; François Gerard; Lorenzo Lagos; Claire Montialoux |
| Abstract: | How do minimum wages affect informality? We study the near-doubling of the real minimum wage from 2000 to 2009 in Brazil, where 46% of the workforce is informal. Using labor force surveys covering the informal sector, we show the minimum wage exhibits near full passthrough to informal employees working in formal firms, about half of all informal employees. The formal-to-informal reallocation elasticity with respect to the formal-wage is small: -0.28. Our findings illustrate how minimum wages can positively affect living standards for workers thought beyond the reach of labor law, a sizable share of the workforce in developing economies. |
| JEL: | J23 J46 J88 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34445 |
| By: | Alexander Bertermann; Wolfgang Dauth; Jens Suedekum; Ludger Woessmann |
| Abstract: | How do firms and workers adjust to trade and technology shocks? We analyze two mechanisms that have received little attention: training that upgrades skills and early retirement that shifts adjustment costs to public pension systems. We combine novel data on training participation and early retirement in German local labor markets with established measures of exposure to trade competition and robot adoption. Results indicate that negative trade shocks reduce training — particularly in manufacturing — while robot exposure increases training — particularly in indirectly affected services. Both shocks raise early retirement among manufacturing workers. Structural change thus induces both productivity-enhancing and productivity-reducing responses, challenging simple narratives of labor market adaptation and highlighting the scope for policy to promote adjustment mechanisms conducive to aggregate productivity. |
| Keywords: | training, retirement, trade, technological change, automation, robots, firms, workers, labor market |
| JEL: | J24 J26 O33 F16 R11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12240 |
| By: | Davide Luparello |
| Abstract: | Contract workers constitute half of employment in India’s automotive industry but earn substantially less than permanent workers. Using data from the Annual Survey of Industries (2002-2019), I develop an estimator of labor supply and demand schedules to explain this wage premium. The model features nested CES production with distinct worker types, discrete choice supply functions with worker type-specific wage sensitivity and differentiated market conduct—Nash-Bertrand competition for contract workers versus plant-level union bargaining for permanent workers. I find that the wage premium stems entirely from permanent workers’ higher productivity rather than differential monopsony power or unionization advantages. |
| Keywords: | Markdowns, Markups, Productivity, India |
| JEL: | L11 L13 L62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp25258 |
| By: | Filippo Boeri; Riccardo Crescenzi; Davide Rigo |
| Abstract: | Using administrative firm-level data covering the universe of remote workers in Italy, and leveraging exogenous pre-pandemic variation in firm-specific access to fibre broadband as an instrument, this paper investigates the impact of post-pandemic adoption of work from home (WFH) on firm productivity. We find that WFH had a large negative impact on productivity during the pandemic. However, larger firms and those with prior ICT investments mitigated these losses. In the longer term, the impact of WFH is no longer significant. Yet, we find suggestive evidence that firms employing highly qualified workers experienced productivity gains. |
| Keywords: | work from home, firms, productivity |
| JEL: | D22 J21 J24 L25 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12253 |
| By: | Brioschi, Alessandro |
| Abstract: | This paper investigates how kinship and professional networks shaped labour market outcomes in early modern Genoa. Using a newly constructed dataset of over 8, 000 apprenticeship contracts (1450-1530), I examine the extent to which kinship ties with masters or guild members influenced both entry into apprenticeship and the probability of attaining mastership. Using a probabilistic record linkage strategy to reconstruct career trajectories, I show that apprentices with kinship ties to insiders were significantly more likely to become masters, received shorter contracts and enjoyed better contractual and training conditions. These advantages persisted even during periods of economic contraction, suggesting that apprenticeship functioned not only as an open mechanism for human capital formation but also as a selective filter reinforcing occupational stratification. The findings contribute to debates on the role of guilds in pre-industrial labour markets, offering empirical support for the view that social networks limited access to skilled work and upward mobility. |
| Keywords: | Apprenticeship, Labour Markets, Guilds, Mastership, Social Networks, Early Modern Italy |
| JEL: | J62 J24 N33 N93 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:qucehw:330674 |
| By: | Edmark, Karin (SOFI, Stockholm University, and); Persson, Lovisa (Kristianstad University, and) |
| Abstract: | We study the wage effects of an expansion of for-profit preschools in Sweden, which followed after a reform in 2006 removed municipalities’ right to veto private entry. The expansion decreased preschool employers’ monopsony power by increasing the number of alternative employers. We use a differences-in-differences event study design to evaluate the impact on preschool workers’ wages, and find no evidence that wages were affected. In the context that we study, the absence of an upward wage effect may be explained by the entering for-profit firms’ propensity to hire less qualified, lower-paid staff, and workers from other sectors of the economy than the preschool sector. |
| Keywords: | Monopsony power; For-profit provision; Preschool workers; Gender gap |
| JEL: | H44 I20 J31 J42 |
| Date: | 2025–11–07 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1541 |
| By: | Marius Brülhart; Aurélien Eyquem; Isabel Z. Martínez; Enrico Rubolino; Enrico Rubolino |
| Abstract: | We study how inheritance affects labor supply over the life cycle, and we quantify its aggregate impact. Tracking earnings histories around some 135, 000 inheritances and 5, 000 lottery wins, we exploit the quasi-random timing and size of these events to identify labor supply responses with high precision. Earnings responses are negative at all ages but peak between ages 55 and 64, largely due to early retirement. Inheritances generate smaller impact responses than comparable lottery wins, consistent with anticipation effects. Our estimates match the predictions of a life-cycle model with endogenous labor supply and early retirement. Aggregating model-based responses across the population, our point estimate of the GDP cost of inheritance is 1.1%. The timing, size, and anticipation of inheritance all contribute to shaping its macroeconomic consequences. |
| Keywords: | inheritance, labor supply, lottery wins, life-cycle effects |
| JEL: | J22 D31 D64 G51 H31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12255 |
| By: | Ann-Kristin Becker; Erik Hornung |
| Abstract: | Industrialization boosts aggregate incomes, but its distributional effects remain debated. We study the impact of coal-driven industrialization on unskilled labor incomes using novel panel data on wages from 667 Prussian localities (1800-1879), extended with county-level data through 1914. Exploiting spatial variation in coal proximity in difference-in-differences and event-study designs, we find that wage gains in coal-rich regions emerged once industrialization accelerated in the 1850s and continued to grow until WWI. Evidence from 3, 000 household accounts shows that coal proximity raised labor incomes primarily for low-skilled workers, with weaker effects for high-skilled and mechanical occupations. This pattern suggests that industrialization reduced wage inequality by compressing the local skill premium. Mediation analysis indicates that wage gains for unskilled workers were primarily driven by technology adoption and the increasing demand for low-skilled labor, rather than by sectoral change or the spread of the factory system. |
| Keywords: | industrialization, labor income, deskilling |
| JEL: | C23 J31 N33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12237 |
| By: | Gaurav Khanna |
| Abstract: | This paper examines the rise of high-skill migration from Asia to the United States over the past three decades and its consequences for both sending and receiving economies. Between 1990 and 2019, migrants from five Asian countries—India, China, South Korea, Japan, and the Philippines—accounted for over one-third of the growth in US software developers and a quarter of the increase in scientists, engineers, and physicians. Drawing on census microdata, visa records, and administrative sources, I show how US demand for talent in information technology, higher education, and healthcare interacted with Asia’s demographic and educational transformations to generate this migration boom. Policy reforms (notably the H-1B, F-1, and J-1 visa programs) and sectoral shifts—such as the internet revolution, declining public support for universities, and aging-related healthcare demand—created persistent needs for foreign students and workers. Asian economies were uniquely positioned to meet this demand through rapid tertiary expansion, strong STEM institutions, English proficiency, and diaspora networks. These inflows boosted US innovation, entrepreneurship, and service-sector productivity while fostering “brain gain” and “brain circulation” in Asia. Together, these trends reveal how talent flows from Asia have become central to the structure and growth of the modern US economy. |
| JEL: | J24 J60 O34 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34449 |
| By: | Heywood, John S.; Nießen, Anna |
| Abstract: | Using German survey data, we estimate the determinants of employee quits examining the roles of performance appraisal and performance pay. We show that employees subject to performance appraisals are less likely to quit. Yet, this influence depends upon the financial consequences that flow from the appraisals. If there are no financial consequences or if the consequences are short term such as under piece rates, commissions or bonuses, quits are lower. If there are only long-term consequences such as permanent changes in base pay or promotion, there is no reduction in quits. We explore this difference suggesting that the long-term consequences create rigidity while the procyclical nature of short-run performance pay creates flexibility. |
| Keywords: | Performance Appraisal, Performance Pay, Voluntary Job Quits, German Socio-Economic Panel |
| JEL: | C23 M50 M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1687 |
| By: | Agarwal, Vikas; Gómez, Juan-Pedro; Hosseini, Kasra; Jha, Manish |
| Abstract: | We model firm executives' compensation incentives when ESG metrics are added to their performance-vested contracts. Drawing on multitasking theory, we predict that incentives tied to standard accounting or financial metrics are reduced after introducing ESG metrics to induce executives to reallocate effort toward ESG goals. Empirically, the expected pay-performance sensitivity of standard metrics decreases by about 20% after ESG adoption, especially when ESG metrics are more numerous, less complementary, or less measurable. The tradeoff is associated with improved ESG ratings, consistent with efficient incentive design under multitasking that optimally balances effort across financial and ESG objectives. |
| Keywords: | ESG pay, multitasking, pay-performance sensitivity, dollar delta, incentives, executive compensation, metrics |
| JEL: | J33 M12 M14 G34 G32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cfrwps:330666 |
| By: | Bertermann, Alexander (ifo Institute, University of Munich; bertermann@ifo.de. Dauth:); Dauth, Wolfgang (Institute for Employment Research (IAB) and University of Bamberg); Suedekum, Jens (DICE, Heinrich-Heine-Universität Düsseldorf); Woessmann, Ludger (University of Munich, ifo Institute; Hoover Institution, Stanford University; CESifo, IZA, and RFBerlin) |
| Abstract: | How do firms and workers adjust to trade and technology shocks? We analyze two mechanisms that have received little attention: training that upgrades skills and early retirement that shifts adjustment costs to public pension systems. We combine novel data on training participation and early retirement in German local labor markets with established measures of exposure to trade competition and robot adoption. Results indicate that negative trade shocks reduce training - particularly in manufacturing - while robot exposure increases training - particularly in indirectly affected services. Both shocks raise early retirement among manufacturing workers. Structural change thus induces both productivity-enhancing and productivity-reducing responses, challenging simple narratives of labor market adaptation and highlighting the scope for policy to promote adjustment mechanisms conducive to aggregate productivity. |
| Keywords: | training, retirement, trade, technological change, automation, robots, firms, workers, labor market JEL Classification: J24, J26, O33, F16, R11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:781 |
| By: | Cristina Bellés-Obrero (Institute for Economic Analysis (CSIC), BSE, IEB & IZA); Giulia Montresor (University of Verona); Catia Nicodemo (Brunel University of London & University of Oxford) |
| Abstract: | This paper estimates the causal effects of extreme temperatures and a related adaptation policy on workplace accidents in Spain, combining administrative records on occupational accidents with high-resolution weather data. Both cold and heat raise the incidence of work accidents, though with different magnitudes:ice days (maximum temperatures |
| Keywords: | Temperature, workplace accidents, adaptation policy, climate change |
| JEL: | I1 J28 J81 Q54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ieb:wpaper:doc2025-12 |
| By: | Gouzoulis, Giorgos; Papadopoulou, Aggela |
| Abstract: | This paper examines the Black-White pay gap in the United States from 1989 to 2024 using quarterly data from the Bureau of Labor Statistics and the Federal Reserve's Distributional Financial Accounts. Building on existing political economy research, which suggests that personal debt reduces workers' bargaining power by making them more risk-averse in wage negotiations - particularly when job loss threatens their ability to service debt - this study argues that racial discrimination in both personal credit markets and wage negotiations disproportionately disciplines racialized social groups. Regression analysis shows that rising household debt liabilities-to-assets ratios for Black households and a higher share of white business owners have crucially contributed to the persistent wage gap between Black and White Americans. Interestingly, interacting the two coefficients shows that a higher share of white businesses slightly mitigates the effect of debt held by Black workers on the black-white earnings gap. This potentially implies that, despite discriminatory practices, white businesses might represent a relatively more stable employment option for indebted Black workers, thereby reinforcing a vicious cycle of self-perpetuating racialized economic inequality. |
| Keywords: | Racial Pay Gap, Personal Debt, Household Financialization, United States |
| JEL: | B50 J15 J31 J70 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1686 |
| By: | Punarjit Roychowdhury; Sourish Mustafi; Bharti Nandwani |
| Abstract: | This paper examines the effects of exposure to hard-security counterinsurgency operations during school-age years on human capital and labor market outcomes in India. We exploit the 1989 introduction of the Greyhounds—a specialized commando force created to combat Naxalite insurgents—in Andhra Pradesh, as a natural experiment. Among all states affected by Naxalite violence, only Andhra Pradesh established such a force during that period. Difference-in-differences estimates suggest that exposure to the policy during school-age years led to increased educational attainment and, in adulthood, better labor market outcomes and improved socioeconomic status. We provide suggestive evidence that a plausible mechanism underlying these effects is increased household investment in education due to reduced uncertainty stemming from improved security. Our findings highlight the economic returns to peace and stability in conflict-affected regions. |
| Keywords: | childhood, conflict, counterinsurgency, education, employment, india |
| JEL: | D74 F52 H56 O12 O15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hic:wpaper:441 |
| By: | Shaohui Wang |
| Abstract: | This paper develops a unified game-theoretic account of how generative AI reshapes the pre-doctoral "hope-labor" market linking Principal Investigators (PIs), Research Assistants (RAs), and PhD admissions. We integrate (i) a PI-RA relational-contract stage, (ii) a task-based production technology in which AI is both substitute (automation) and complement (augmentation/leveling), and (iii) a capacity-constrained admissions tournament that converts absolute output into relative rank. The model yields four results. First, AI has a dual and thresholded effect on RA demand: when automation dominates, AI substitutes for RA labor; when augmentation dominates, small elite teams become more valuable. Second, heterogeneous PI objectives endogenously segment the RA market: quantity-maximizing PIs adopt automation and scale "project-manager" RAs, whereas quality-maximizing PIs adopt augmentation and cultivate "idea-generator" RAs. Third, a symmetric productivity shock triggers a signaling arms race: more "strong" signals flood a fixed-slot tournament, depressing the admission probability attached to any given signal and potentially lowering RA welfare despite higher productivity. Fourth, AI degrades the informational content of polished routine artifacts, creating a novel moral-hazard channel ("effort laundering") that shifts credible recommendations toward process-visible, non-automatable creative contributions. We discuss welfare and equity implications, including over-recruitment with thin mentoring, selectively misleading letters, and opaque pipelines, and outline light-touch governance (process visibility, AI-use disclosure, and limited viva/replication checks) that preserves efficiency while reducing unethical supervision and screening practices. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.00068 |
| By: | Baksy, Aniket (University of Melbourne); Chandler, Daniel (LSE); Lambert, Peter John (LSE & University of Warwick) |
| Abstract: | Using a novel proprietary survey of UK manufacturing sites, we study the impact on employment of arguably the two most important industrial automation technologies of the past fifty years: computer numerical control (CNC) machine tools and industrial robots. First, we document the growing prevalence of both technologies across a wide range of industries between 2005 and 2023. Second, we use a local-projection difference-in-difference design to show that plants that adopt these technologies for the first time increase their employment by 6% to 9% compared to non-adopting plants in the same industry. Third, we find that for both technologies, automation is associated with an increase in employment among industry-competitor sites, and a positive overall impact on industry-level employment. |
| Keywords: | Automation, Manufacturing, Employment, Technology Adoption, Robots JEL Classification: J23, L60, O33, D24, J63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:778 |
| By: | Ana Flávia Machado (Cedeplar/UFMG); Mariangela Furlan Antigo (Cedeplar/UFMG); Izabel Cristina Carvalho de Oliveira (Cedeplar/UFMG); Lucas Ribas (Cedeplar/UFMG); Lorena Ferrari Auareck (UFMG); Cinthia Santos Silva (Cedeplar/UFMG); Glenda Nunes Gomes (UFV) |
| Abstract: | The model developed by Throsby in A work-preference model of artist behaviour, in 1994, has given rise to a series of theoretical and empirical works to assess whether the insertion of artists as workers is due to non-pecuniary issues such as acceptance by peers and fans, idiosyncratic life, and free expression of their creativity vis-à-vis pecuniary returns. In some studies, it is shown that, on average, artists are more satisfied with their work than other professionals, as exposed by Bille et al. (2013) and Bille, Løyland, and Holm (2017). Inspired by Bille et al. (2017), this paper investigates the labor supply of artists, aged between 18 and 65 years old, residing in urban areas in Brazil. The research covers the period from 2016 to 2022. The data source is the Continuous National Household Sample Survey (PNADC/ IBGE), organized as a rotating panel with five visits to the same household. The period between 2016 and 2022 is considered in the present study. The results show that levels of low earnings in other jobs have a positive relationship with artistic work hours and a negative relationship with leisure hours, while higher wage levels show an inverse relationship with leisure hours. |
| Keywords: | artist, labor, supply, urban, Brazil |
| JEL: | Z1 J44 E24 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cdp:texdis:td686 |
| By: | Zhiguang Li (School of Economics and Management, Anhui University of Chinese Medicine and Key Laboratory of Data Science & Innovative Development of Traditional Chinese Medicine, Philosophy and Social Sciences of Anhui Province, Hefei, Anhui China); Yanrui Wu (University of Western Australia Business School, Perth, Australia); Fan Zhang (School of Economics and Management, Anhui University of Chinese Medicine, Hefei, Anhui China); Yuqing Zhang (School of Economics and Management, Anhui University of Chinese Medicine, Hefei, Anhui China) |
| Abstract: | This article examines the nexus between government attention to pension affairs, characteristics of officials-in-charge and performance or efficiency of China’s public pension funds (PPFs). It uses the fuzzy set qualitative comparative analysis and data of government attention to pension affairs and characteristics of PPF officials from 20 provinces during the period of 2015-2019. The research results show that four configurations namely promotion-driven, resource-endowment-driven, government-led and seniority & localization-empowerment pathway are associated with high efficiency of PPFs. There are also four configurations namely poor professionalism, working efficiency stagnation, lack of local emotional attachment, and policy failure which lead to low efficiency. In addition, the high or low level of efficiency is the result of multiple factors working together rather than a single dominant factor. The professionalism, relevant working experience and local emotional attachment of the officials in charge of PPFs could compensate for the institutional gap due to low government attention to pension affairs. Furthermore, there exists a potential substitution relationship among factors that affect the performance of PPFs. Finally, the efficiency of PPFs is influenced by multiple complex factors that vary significantly across both temporal and spatial dimensions. Policy design should take into account of the diversity of regional economic development levels, official characteristics, and local institutional environments so that flexible and targeted management approaches are adopted to promote the efficient operation of PPFs. Policy makers should pay attention to temporal factors and regional disparities and formulate flexible and adaptive governance strategies tailored to the specific conditions and characteristics of individual provinces. |
| Keywords: | Public pension funds, Efficiency, Government attention, Official characteristics, fsQCA, Dynamic QCA, China |
| JEL: | H55 J32 D73 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:uwa:wpaper:25-10 |
| By: | Peyman Shahidi; Gili Rusak; Benjamin S. Manning; Andrey Fradkin; John J. Horton |
| Abstract: | AI agents—autonomous systems that perceive, reason, and act on behalf of human principals—are poised to transform digital markets by dramatically reducing transaction costs. This chapter evaluates the economic implications of this transition, adopting a consumer-oriented view of agents as market participants that can search, negotiate, and transact directly. From the demand side, agent adoption reflects derived demand: users trade off decision quality against effort reduction, with outcomes mediated by agent capability and task context. On the supply side, firms will design, integrate, and monetize agents, with outcomes hinging on whether agents operate within or across platforms. At the market level, agents create efficiency gains from lower search, communication, and contracting costs, but also introduce frictions such as congestion and price obfuscation. By lowering the costs of preference elicitation, contract enforcement, and identity verification, agents expand the feasible set of market designs but also raise novel regulatory challenges. While the net welfare effects remain an empirical question, the rapid onset of AI-mediated transactions presents a unique opportunity for economic research to inform real-world policy and market design. |
| JEL: | D47 D83 J44 K20 L15 L86 O33 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34468 |